This papers is based on the Harvard Business Case survey about Carnival Cruise Lines Applegate, Kwortnik, Piccoli, 2006. It is written as a maestro thesis for the Master of Information Management ( MIM ) surveies by Christianne Aussems, Nathalie Claes, Eric Janssen and Corne van Schaik, under the supervising of Piet Ribbers, Professor of Information Management, all at TiasNimbas Business School in Tilburg.

1.1 About this study

This study describes the information direction scheme for Carnival Cruise Lines ( CCL ) for the period 2007-2011. It proposes alterations in organisation, direction, systems, and administration construction for CCL and describes the execution program, including prioritization and a costs and benefits analysis. The mark audience of the study is Myles Cyr, CIO of Carnival Cruise Lines, and in add-on for the strategic direction degree of CCL.

1.2 Assignment description | Aim and Scope

[ assignment- & gt ; ]

[ Bob Dickinson informed the board about the ends for the following old ages. He wants Carnival Cruise Lines to remain the market leader and to better the repetition invitee rate. He is convinced that the possible value of client informations is turning. Therefore he is looking for a manner to pull off client relationships more adequately. In the meeting he besides mentioned the desire to cut down the spread between quality betterments and client perceptual experiences of the services.

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Myles Cyr agrees on set uping a new gross revenues scheme for the old ages to come and on the necessity to cognize the clients better. He wants to integrate an overall vision on and rating of the information architecture and the bing information systems.

At this minute he and Dwayne Warner are believing of get downing the readying an extended alteration ( perchance a rebuild ) of the shipboard systems ( Property Management System and Point of Sale Systems ) including the replacing of the Sail & A ; Sign card ( with magnetic strip ) by a bit card in combination with the debut of portable equipment based on the IP protocol.

Myles Cyr explicitly asks to lucubrate on the chances of IS to lend to the concern and to the value concatenation. The board is anticipating that the comparative IT operating costs can be reduced in the following old ages. He expects an analysis and rating of the current province of IT/IS. What is good? What possible failings are at that place? What jobs have to be solved? Which betterments are opportune? He expects a balanced study incorporating your proposals to heighten the quality of informations processing and information provisioning ( including managing client informations ) . Carnival Cruise Lines can merely defy and crush the market forces, if the company is advanced, acts nimble and reacts fast and efficaciously to alterations in the markets. ]

[ research questions- & gt ; ]

Subjects to be incorporated in study:

-Existing bottle cervixs that have to be removed.

-Changes in organisation, direction, control construct and administration.

-Changes in systems, informations processing and informations provisioning.

-Change direction procedure to run into the proposal.

-Implementation program including prioritization.

-Risk appraisal of the constituents of your advice.

-Improvement of security and hazard direction ( particularly privateness protection ) .

-Costs and benefits analysis of the proposed options.

1.3 Structure

Beschrijven new wave fase naar fase Cindy

1.4 Approach

To garner excess information on IT in the cruising sector there was the chance to make qualitative research at another cruising organisation being Royal Caribbean.

Gekozen voor andere maatschappij om huidige bedrijfsvoering niet Te verstoren/verontrusten?

The research performed here was qualitative research trough semi structured interviews As described in the bookaˆ¦ p467. For this research the full IT executive squad ( see appendix ) was found willing and able to take part.

Interview ushers were created, for these interviews. These described the ends and subjects of the interview and the inquiries to be asked. This gave the research workers a construction to inquire the inquiries, non to bury of import inquiries and non to acquire distracted from the ends of the interview. On the other manus this attack besides gave flexibleness to discourse unanticipated but relevant subjects.

On forehand it was non clear for all the interviewees what their function and duties where and what to inquire them. This attack besides gave the flexibleness to get down the interview with merely a few inquiries but in the terminal holding gathered a batch of information. Bing able to interview more than 10 different IT executives in different functions and on different degrees besides gave an penetration on of import subjects on that minute.

Interview usher interview proceedingss

For the executing of the interviews there was a clear division of the functions between the interviewers, there was one interviewer in the lead for inquiring the inquiries, one look intoing whether all the inquiries were asked and one devising notes for the meeting proceedingss.



1.5 Constraints


Tool selectie reeds gedaan

2. Carnival Cruise Lines Today

Carnival Corporation & A ; plc is a planetary sail company and one of the largest holiday companies in the world.A Carnival generates all of its grosss from the sail industry. The companies wide-ranging merchandise offerings provide invitees with exceeding holiday experiences at an outstanding value. The success in supplying quality sail holidaies has made Carnival the most profitable company in the leisure travel industry. Carnival ‘s stock is dually listed on both the New York Stock Exchange and on the London Stock Exchange under symbol CCL. Carnival is the lone company in the universe to be included in both the S & A ; P 500 index in the United States and the FTSE 100 index in the United Kingdom ( Carnival Corporation & A ; PLC, 2012 ) .

Carnival Corporation operates a fleet of 100 ships, with another seven ships scheduled for bringing between now and March 2016. With about 200,000 invitees and 77,000 shipboard employees, there are more than 277,000 people sailing aboard the Carnival fleet at any given clip ( Carnival Corporation & A ; PLC, 2012 ) .

For the intent of our study it is important to understand how the Carnival Cruise Lines corporation works today. We need to understand how the assorted facets of the concern are set up and how they work together. Merely after a true apprehension of the current state of affairs, we can come with proposals for betterment and bespeak the impact on current ways of working.

In literature one can ticket many theoretical accounts that can be used to look at an organisation with an internal position. In appendix X we provide an overview of some direction theoretical accounts we have found in literature, with an account why, when and how it should be used. Since our study needs to cover the execution of a new IT direction scheme, we have decided to utilize McKinsey ‘s 7S theoretical account. This theoretical account, developed in the 1980 ‘s, involves 7 factors, which can be categorized as difficult and soft elements. Difficult elements can be identified and influenced more easy. They would be driven by the organisation charts and describing lines within the concern and they may include the systems you use to acquire work done. Soft elements are, by their very nature, more hard to pull off and may be affected by the civilization of the organisation. But you have to use yourself to these every bit much as the difficult elements, as they provide the support construction for the successful execution of any alteration, and they are all interdependent on each other.

Figure X 7S model ( McKinsey )

The difficult elements in the 7S-model are Strategy, Structure and Systems ; the soft elements are Style, Shared Values, Skills and Staff. In order to understand the 7S-model better a brief account is given below.

Difficult elements:

i‚ StrategyA – by utilizing mission and vision the organisation ‘s aims become clear.

i‚ StructureA – how is the organisation structured and which hierarchal beds are at that place

i‚ SystemsA – all formal and informal methods of operation, processs and communicating flows

Soft elements:

i‚ StyleA – this is about leading and direction manners

i‚ Shared valuesA – the criterions and values and other signifiers of moralss within an organisation in which vision, corporate civilization and individuality are the cardinal elements

i‚ SkillsA – these concern both the accomplishments of the organisation and those of the employees

i‚ StaffA – this is about the employees, their competencies and occupation descriptions

2.1 Strategy of CCL

The mission of Carnival Corporation is to take the universe on holiday and present exceeding experiences through many of the universe ‘s best-known sail trade names that cater to a assortment of different geographic parts and life styles, all at an outstanding value unrivaled on land or at sea ( Carnival Corporation & A ; PLC, 2012 ) .

The vision statement of Carnival is the undermentioned: to systematically present merriment, memorable holidaies at a repetition value.

Derived from this mission and vision, Carnival Cruise Lines has set up the following strategic aims:

to be the taking sail operator in allA sections entered and to keep the most up-to-date fleet of sail ships in the universe

to develop new cruiseA sections and advanced sail bundles to make a larger figure of possible andA past patrol cars

employ sophisticated promotional attempts toA achieve a greater consciousness by the publicA refering the handiness and afford ability ofA sail travel

pull the first-time and younger patrol cars ( Carnival ) , experient patrol cars ( Holland America ) , upscale patrol cars ( Seaborne ) , and patrol cars desiring a seafaring holiday ( Windstar )

promote sails as anA alternate toA land-based holidaies

supply a assortment of activities every bit good as ports of call

be advanced in all respects of operations of the ship. BRON

Dominant market portion

Carnival ‘s biggest strength is its immense graduated table and range. It is twice every bit big as its biggest rival and competes in about every market and section worldwide. This gives Carnival tremendous power over the sail industry as a whole. It enables the company to set about undertakings that grow the industry, gives it a platform for continued amalgamations and acquisitions activity, and helps Carnival negotiate with major makers of sail ships ( Levin, Jones, & A ; Slade, 2011 ) .

Strong acquisition scheme

Carnival has the ability to obtain companies through acquisitions. By utilizing an acquisition scheme, the Corporation has been able to place itself in each geographical market in the universe and rank itself as figure one in the cruising sector.

Comprehensive portfolio

The corporation has a big fleet capacity and operates 11 of the most recognizable sail trade name names. Carnival ‘s portfolio of trade name names entreaties to about every niche market, from budget minded, modern-day to luxury sails. Each sail line operates globally and is targeted at one or more nationalities ( see Appendix X ) .

2.2 Structure of CCL

Carnival Corporation & A ; plc has two chief central offices, Carnival Place in the US and Carnival House in the UK. The constitutional Corporation and plc are separate listed companies with different stockholder organic structures, but they jointly own all the operating companies in the group. Carnival Corporation owns the bulk interest. As portion of the amalgamation between Carnival Corporation andA P & A ; O Princess CruisesA in 2002, it was agreed that P & A ; O Princess would be relisted as Carnival plc in London, staying a separate company with a preponderantly British stockholder organic structure. Both central offices have their ain direction squad, scheme, and IT organisation.

Uncoordinated concern operations

Historically, Carnival has been run by the Arison household as a alliance of mostly independent concerns. Each sail line mostly manages its ain clients, selling, distribution, gross revenues, ports, and logistics. This attack has had benefits: internal competition means that each line operates better than any would in isolation. The concern operations of the sail lines are non centrally managed. Better coordination of these concern operations could bring forth extra benefits for Carnival ( Levin, Jones, & A ; Slade, 2011 ) .

Strong fiscal place

Carnival is one of the most profitable cruising companies. The company ‘s mean net income ( FY2005 to FY2009 ) amounted to 18.1 % compared to the industry criterion of 6.3 % ( Marketingteacher, 2012 ) . The house is double listed on the New York Stock Exchange and the London Stock Exchange under the symbol CCL. Since the company is double listed, it has the ability to raise more financess from investor than its rivals. With this besides come greater stableness due to different markets being affected by different economic happenings, political issues, and society ‘s positions ( Corporate information, 2006 ) .

Decreasing net income

The net income of Carnival has diminished over the last old ages. The net net income was $ 1,790 million in FY2009, a lessening of 23.2 % as compared to 2008. Another failing is that Carnival reports their fiscal statements in dollars. About half of their gross is generated in a non-US currency, but is reported in footings of US dollars. The value of the dollar against Euro appreciated from 1.60 in January 2010 to 1.53 by April 2010 against the Pound. If the dollar strengthens it would enter a lower gross than is really earned ( Marketingteacher, 2012 ) .

Clear focal point cost leading

Carnival Cruise Lines has a clear focal point on Cost Leadership, i.e. CCL offers its merchandise to the mass market. Therefore the highest focal point is put on the monetary value and maintaining the monetary value every bit low as possible. Once the client is on board the ship, extra gross is created by holding the client wage for everything that was non covered in the basal monetary value. Carnival is such a big company that it has important cost advantages over most of its rivals.

Strong selling

Carnival invests explicitly and efficaciously in print and telecasting media. Their publicities target the life styles of each group of clients ( Marketingteacher, 2012 ) .

Over-dependence on US market

Carnival derives a bulk of its gross ( about 52 % ) from US clients. In 2009 the gross from the North American market registered a dual digit diminution. The over-dependence on the US market makes Carnival vulnerable to the economic fluctuations of the American economic system and this company is dependent on clients ‘ disposable income ] ( Marketingteacher, 2012 ) .

Poor safety record

There is no public database of major sail accidents, but Carnival has a notably worse safety record than other sail companies. The Costa Concordia calamity has been the most recent in Carnival ‘s safety sufferings.

The Center for Disease Control does track all major viral eruptions on sail lines. In the 2009-2011 period, Carnival-owned companies accounted for 56 % of all viral eruptions, compared to a 48 % mean market portion. The company is besides thought to hold a worse safety record for individuals lost at sea, particularly in the Carnival trade name: of the 179 disappearings since 2000, Carnival Cruise Line entirely histories for about 30 % of them ( Levin, Jones, & A ; Slade, 2011 ) .

Incidents/Bad imperativeness

In 2009, Carnival experienced bad imperativeness when three riders fell off ships in a three hebdomad period. There were a sum of 22 incidents of riders falling overboard in 2009. In December 2008, riders on the Carnival owned Oceania sail ship were attacked by Somali plagiarists. Such events reflect negatively on the company and the industry.

2.3 Systems in CCL

Within Carnival Cruise Lines every trade name is seen as a separate concern unit, with its ain net income and loss statement.

Decentralized systems

This decentalisation translates into a decentalisation of systems as good. Decisions are n’t ever communicated from the one sail line to the other, which leads to duplicate of attempt. This decentalisation of the concern organisation translates to the IT organisation every bit good. Every trade name has its ain IT section with ain systems and substructure.

Bequest systems

There are many bequest systems, since there are n’t many participants in the cruising sector, most of the strategic of import applications are custom made. This leads to a spaghetti landscape in which integrating is really hard and which affects the velocity to market significantly.

No integrated CRM system

Carnival does n’t utilize an integrated CRM system for the whole corporation. Customers from the one sail line are n’t recognized as a repetition client with a different sail line within the group, this has an immediate consequence on the pricing for repetition clients.

The annual capital planning of investings is done on US and UK Headquarter degree every bit good as on the different sail line degree. This will most likely lead to miss on synchronism and duplicate of costs and attempts.

2.4 Style within CCL

The leading manner at Carnival Cruise Lines can be called family-like. Peoples with the right accomplishments are hired and are giving the support and room to make their occupations right. This family-like leading manner is a direction manner that Ted Arison already used when he was still maneuvering the company. Ted Arison had a non-hierarchical attack to direction, significance that he delegated a batch of work downwards in the organisation, leting him to supervise the bigger image.

Peoples are encouraged to be hands-on and take deliberate hazards. Taking hazards besides means that errors can happen, nevertheless Carnival uses a no blasted civilization through which people feel empowered ( Managementparadise, 2012 ) .

Carnival has a separate preparation and development section set up in the organisation. The corporation invests to a great extent in coaching of high potencies by giving them larning chances that are fit for their personal demands.

2.5 Shared values of CCL

Derived from the mission and vision of Carnival ( see 2.1.1 ) the company has set some company values that wear a high precedence. These values are: Honesty, unity, equity, cordial reception and teamwork. The values are deemed of import to make their occupation in a right mode.

Carnival, as all other sail lines in the industry, takes much proud in the focal point they put on the environment. They invest to a great extent in wellness and safety, both for clients and for employees. There is a really strong focal point on the environment and to work in a greener manner. Charity is besides one of the cardinal constituents of their societal duty scheme.

2.6 Skills at CCL

Working in the leisure industry requires some specific accomplishments that you can non ever learn. Most of import accomplishments that person working in the leisure industry would necessitate, are the undermentioned:

Customer focused


Team work

Stress resistant


Service orientation

Multi lingual

Since Carnival Cruise Lines wants to be seen as the sail line that delivers fun, the attitude of the employees is really of import as good. The employees need to be cheerful and enthusiastic.

2.7 Staff at CCL

Cruise ships typically operate with three categories of crew. The first is the officers: these professionals are extremely paid and given ultimate bid of the ship. The 2nd is entertainers and wait staff: typically lower-paid, but from the same states as the patrol cars that they serve. Finally, most of the ships ‘ crew is drawn from developing states. While wage is low, the wage can stand for an attractive chance for these workers, who frequently work 10-month contracts without being able to see their places and households. Employee turnover is high, and few of the crew see working on a sail ship as a feasible long-run calling. Staff remains 24/7 on board of the ship, have their ain cabins at the lowest two decks of the ship. Lone officers are allowed to blend between invitees, this at particular occasions and in formal garb. Other crew members have dedicated times during which they can be present on guest decks.

Operational excellence & A ; experience

Carnival has achieved below-industry-average costs and above-average gross historically. This is mostly due to the company ‘s huge experience in owning and operating sails, every bit good as some smart strategic dramas. That advantage makes spread outing into new markets immensely easier for Carnival than for a smaller participant or nouveau-riche house.

Carnival has the largest pool of informations to pull on to find what does and does non work and has the most experient sellers of sails in the universe. These ‘soft ‘ advantages let Carnival potentially section its clients more expeditiously than rivals ( Levin, Jones, & A ; Slade, 2011 ) .

3. Carnival Cruise Lines Competitive Position

5 forces theoretical account of Porter ( Levin, Jones, & A ; Slade, 2011 )

Harmonizing to Michael Porter, the province of competition in an industry depends on five basic forces ( Porter, 1980 ) . These forces are: Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of New Entrants, Threat of Substitutes, and Rivalry among Competitors. The corporate strength of these combined forces determines the ultimate net income potency of an industry. The undermentioned paragraphs are based on Levin et Al. ( Levin, Jones, & A ; Slade, 2011 ) and interviews at Royal Caribbean.

3.1 Bargaining power of providers

Supplier Power within the sail line industry is reasonably strong. Most of a sail ship ‘s supplies are bought on an unfastened, competitory market. The menace of integrating by these providers is really low. One noteworthy exclusion is Carnival ‘s new physiques. There are merely 6 major shipyards that have late built sail ships, and 2-3 more that either perform transitions or have built ships before 2000. Capacity and capableness at these chief builders is besides limited, so Carnival Corporation relies on a limited figure of makers for its new physiques. The high provider power within the ship building is weakened because the relationship is symmetrical: cruising is a likewise concentrated market. Additionally, the monolithic purchase value of a new ship provides a ample inducement for ship providers to supply sail line drives with competitory pricing.

Additionally, cruise ship companies such as Carnival face extended shift costs, both in edifice and running a ship. Switch overing a ship ‘s maker is enormously expensive for sail companies because, typically, the shipwright owns the right over a ship ‘s design, which means that, in exchanging shipwrights, sail line companies have to incur high pecuniary and clip costs in redesigning the ship. Such a switch can be the sail line company 1000000s of dollars. Further, there is high input distinction between ships, intending that, while there are options for the bulk of supply constituents ( both in ship building and in sail service ) , the sail ship company markets specific ships and comfortss to the consumer, thereby increasing exchanging costs and supplier power.

3.2 Bargaining power of purchasers

Buyer power within the sail line industry is comparatively low. By contrast to most other holidaies, more than two tierces of sails are still booked through travel agents. Further, clients are spread around the universe and do non hold any mechanisms through which they can show a corporate voice or exercise corporate power, go forthing them with minimum control. Additionally, clients do non hold the ability or resources to make the sail experience by themselves – it is, by nature, a extremely packaged trade. In add-on, the experience offered by a sail is really alone, and differs from other types of holidaies enough that clients who prefer sails are likely to take them over other types of holidaies, so long as the cost is non a significant barrier. Buyer power is increased by cyberspace hunt engines which enable comparings of monetary value and specifications across multiple locations, trade names, and companies. In add-on, the continued high trust on travel bureaus increases purchaser power because travel bureaus make volume purchases and can demand lower monetary values based on the volume of clients they refer to specific companies.

3.3 Threat of new entrants

The hazard of entry of new rivals to the sail line industry that could supply a plausible menace to Carnival Corporation in nucleus markets is low. Entry into the high-end sail line industry requires capital of about $ 1 billion since it costs, on norm, $ 400 million to construct a ship. Further, big sail ships employ 100s of crewmans and crew that are trained for sea responsibility, which creates an extra cost. Since trade name acknowledgment is really of import in the sail line industry, it would take a new rival valuable clip to construct an individuality and repute in order to be able to vie with the officeholders. Last, there are rigorous authorities and international ordinances that are involved with a sail company. Obtaining proper licenses to run, every bit good as the political connexions, would besides be a company a big sum of clip and resources. In Asia, nevertheless, Carnival might be more concerned about new entrants. Asiatic operations, markets, and clients are much less defined than in the Americas or Europe, and outlooks of sail quality and graduated table are lower. There are legion Asiatic enterprisers and companies that might be able to tap into this aggressive market.

3.4 Menace of replacements

There are many replacements, such as all inclusive, Club Med, and alternate holiday bundles. However, market research indicates that sail lines provide higher client satisfaction than land based holiday bundles. Cruisers express an overall 94.8 % satisfaction rate with their experiences. Any holiday can be substituted for, and there is non a high cost to alter, which makes the menace of permutation seem really high. This tendency has fueled the go oning development of the sail holiday experience. Over the old ages, sail lines have expanded paths to include more diverse ports of call and have introduced advanced onboard comfortss and installations to vie with land based travel. These onboard experiences include cell phone entree, Internet coffeehouse and Wi-Fi zones which allow riders to experience as if they are connected on land. They have besides added onboard experiences such as rock-climbing, bowling back streets, surfing pools, multi-room Villas, multiple themed eating houses and expansive watering place, wellness and fittingness installations that easy rival land-based options ( CLIA, 2012 ) Although there are many replacements to the sail line industry, they can non retroflex the sail line experience.

3.5 Rivalry of rivals

Carnival is the taking company within the sail line industry due to its multiple fleets and important international presence. There are important barriers to entry and issue within the sail line industry, which has resulted in a high concentration ratio. The sail line industry is efficaciously an oligopoly market, where several major sail line drives make up more than 90 % of the market portions. Carnival is invariably engaged in selling and pricing conflicts with these rivals, doing internal rivalry cardinal to the industry. Additionally, sail lines have historically been capable to heavy amalgamations & A ; acquisitions activity, and Carnival sometimes competes to get even more portion.

Overall, Carnival ‘s stigmatization is strong within the industry, and even stronger within its market class ( modern-day ) . When compared to its rivals, Carnival continues to stay a formidable force in the sail industry.

Figure Ten: 5 forces theoretical account for Carnival Cruise Lines

4. Cruise Industry Developments

We will utilize a PESTEL analysis to supply the context of the cruising industry as a whole, in order to understand the organisation ‘s function in relation to the external environment. The PESTEL analysis provides a context for the organisation ‘s function in relation to the external environment. The PESTEL analysis technique is frequently used in concurrence with aA SWOT analysis to measure the state of affairs of a concern. PESTEL covers Political, Economic, Social, Technological, Legal and Environmental factors. The analysis consists in carefully finding all factors and happening out precisely in what manner and to what extent these factors influence the company. Each class of factors is of important importance to progress strategic direction ( Marketingminefield, 2012 ) .

Figure 2 gives an overview of PESTEL factors for the Cruise Industry. The PESTEL analysis is farther explained in the undermentioned subdivisions of this chapter.




Turning market in Asia

Multiple trade organisations and lobbyist:

-Cruise Lines International Association

-Florida-Caribbean Cruise Association ( merchandise organisation )

-International Council of Cruise Lines ; Cruise industry lobbyist

-North West & A ; Canada Cruise Association ( trade organisation for Hawaii and Pacific North West )

-Passenger ship Association

-International Maritime organisation ( IMO ) portion of the United Nations


Profitable concern ; patrol cars spend typically more on holiday so non patrol cars

Pricing based on informations analysis

Large market portion to gaining control ; cruising industry is the fastest turning subdivision of the entire leisure industry


Global economic recession

Decrease in growing for South of Europe due to bad economic system

High fuel monetary values


Geopolitical instability

-Terrorism actions

Tax loopholes




Strongly favourable Demographics

Changing consumer tendencies: more focal point on wellness, spa agreements, more diverseness in dining and other merchandising points

Changing function of travel agent

Number of on-line engagements is increasing and increasing more every twelvemonth


Changing consumer tendencies: Bring Your Own Device ( BYOD ) , connectivity

Technological development in satellite communicating:

-State of the art engineering possibilities on the ship

-Higher connectivity on the ship


Due to the detonating market in Asia, systems need to be set up in Chinese characters. This is a challenge for most systems

Outsourcing degree 2 & A ; b 3 support is hard because the cognition is really specific


Overblown media attending when something happens on a sail ship




Events in the outside universe ( 9/11, Costa Concordia clang and Ash cloud Iceland )


Complex diverseness of environmental, wellness and safety statute law

Figure Ten: PESTEL analysis Cruise Industry

4.1 Political Factors

Political factorsA represent the manner and extent to which a authorities influences the economic system and the concern. Specific countries are: labour jurisprudence, revenue enhancement policy, duties, trade limitations and environmental jurisprudence.

Geopolitical Instability

[ In 2011, the Arab Spring revolutions caused important upheaval across the Eastern Mediterranean. While commendable from a democratic position, these types of break besides tend to close down sails. While the Eastern Mediterranean is a comparatively little market, Carnival must watch for future menaces and respond suitably. Obviously, most geopolitical menaces are ineluctable from Carnival ‘s position. However, most patrol cars are non wedded to a specific finish. If Carnival is prepared to swivel rapidly from one part to another, so the losingss from these sails can be minimized. ] ( Levin, Jones, & A ; Slade, 2011 )

This turning geopolitical instability additions throughout the whole leisure and cruising industry an increased fright for terrorist onslaughts. The menace of terrorist act and pirates catching cruise ships is a concern for companies in this industry, and besides negatively affect consumers ‘ perceptual experiences of cruising ( Marketingteacher, 2012 ) .

Turning Asiatic Market

While the gross for sails has declined in the US, it is turning in Europe and Asia, taking to more chances for Cruise Lines to spread out in these parts ( Marketingteacher, 2012 ) . Asiatic clients accounted for merely 9.8 % of planetary sail grosss in 2010. However, this market section grew by about 40 % , driven by a new, flush category and aging demographics across the Asia-Pacific part. If decently tapped, Asia could be as of import a market as North America for Carnival within the following 10-20 old ages ( Levin, Jones, & A ; Slade, 2011 ) . Customers in Asia are now looking for epicurean sails as a holiday option. Disposable income of the Chinese consumer has grown yearly by 10 % a twelvemonth. The entire figure of riders sourced from China increased about 74 % in 2009 ( Marketingteacher, 2012 ) .

From a technological point the turning Asiatic market puts the system developers for a challenge. Most systems within Carnival are legacy systems, developed when Carnival was merely looking at the US market. Carnival had ne’er envisioned stepping into the Asiatic market at the minute of system development, so the systems are n’t set up to get by with the Chinese characters.

Trade organisations

There are many trade organisations active in the sail industry. Mostly these trade organisations are focused on one market and they promote actively the cruising experience in that country.

Tax Loopholes

Carnival has been taking advantage of particular revenue enhancement loopholes to avoid paying US corporation revenue enhancements. In 2009 the US authorities decided to look at shuting those loopholes. If these loopholes are closed, it could impact their fiscal statements and financial underside line in the hereafter ( Marketingteacher, 2012 ) .

4.2 Economic Factors

Economic factorsA refer to countries alone to economic system and straight influenced by economic system or comprised by economic system, countries such as rising prices rate, involvement rate, economic growing or exchange rates. All countries can greatly act upon a concern, which makes them an highly of import portion of the PESTEL analysis.

Global economic recession

Global economic recession. Decrease in growing for South of Europe due to bad economic system.

Still large market portion to capture

The sail industry has grown well in the past 10 old ages but still occupies a really little proportion of the planetary holiday market. Cruise lines accounted for merely 4.5 % of the $ 542.2 billion worth of the travel industry in 2009. While the gross for sails has declined in the US, it is turning in Europe and Asia, taking to more chances for Carnival to spread out in these parts. ( Marketingteacher, 2012 )

There is still a large market portion to gaining control ; merely 23 % of Americans has of all time booked a sail ( Interview aˆ¦. ) . There is a strong consumer demand in Europe ( Carnival Cruise Lines, 2012 ) .

Pricing based on informations analysis ( Interview Patrick Manuel )

Changing function of travel agents

Carnival Cruise Lines makes extended usage of travel agents. In their overall value concatenation the function of this intermediary takes a important function. In literature an intermediary is described as ‘an economic agent that buys from providers in order to resell to clients, or that helps consumers and providers to run into and transact ‘ ( Spulber, 1996 ) . Based on this definition, we can separate 2 sorts of mediators:

Transactional mediators: those who move, shop and present physical goods

Infomediaries: those who provide information and information services, normally associating to those physical goods and services ( Papazoglou & A ; Ribbers, 2006 ) .

In the instance of the cruising industry we can clearly specify the travel agents as infomediaries. The travel agent helps the client to book a sail, by supplying him all relevant information and different options that are available.

Due to the rise of Internet Sarkar et Al. ( Sarkar, Butler, & A ; Steinfeld, 1996 ) reference the Threatened Intermediaries Hypothesis ( TIH ) , this hypothesis talks about the beltway of mediators in the value concatenation. The hypothesis argues that on-line consumers will interact straight with online providers, doing the function of mediators redundant. However this hypothesis has besides been questioned by other research workers, who argue that this hypothesis is far excessively simple ( Schmitz, 2000 ) . These research workers point out 3 services that mediators provide, that are frequently neglected in research: stock list keeping for immediateness service intents, cut downing information dissymmetry ; and assemblage, forming and measuring spread information. During our research and interviews it became clear, that the function of the travel agents, particularly in the cruising industry is focused on cut downing information dissymmetry and assemblage, forming and measuring spread information. The merchandise that is being sold, i.e. the sail, is merely excessively complex for most people to book the whole sail themselves. The travel agent is of import in explicating the 38 different room types on board, different dining experiences, etc. Though on-line engagement additions every twelvemonth, this is largely done for the ‘vanilla ‘ sails ; 2 or 3 yearss with limited options. For all other types of sails the function of the travel agent remains important in the procedure.

Fuel Price Hazard

Of all the issues confronting the sail industry today, lifting fuel monetary values and the demand to go more environmentally friendly are possibly the most urgent. For operators, progressively expensive fuel has had a negative impact on operating costs. Increasingly rigorous environmental ordinances have made the demand to get down utilizing cleaner signifiers of fuel an pressing affair, but doing the switch can be a dearly-won concern that could direct fuel monetary values surging ( Adams, 2011 ) . Recently Carnival and other cruising companies have imposed modest ‘fuel surcharge fees ‘ . These fees frequently are non evident until rather late in the sail engagement procedure, so these surcharges upset comparatively few clients and add some excess gross ( Levin, Jones, & A ; Slade, 2011 ) .

4.3 Social Factors

Social factorsA chiefly refer to demographic factors, which comprise factors like population growing rate, cultural facets, age distribution and wellness consciousness.

Strongly favourable demographics

Demographic displacements will determine the hereafter. Critical issues and tendencies deserve attending.

In the sail industry, the under-65 ‘s are considered ‘the immature set ‘ . As populations across Europe and North America age, Carnival ‘s mark market is turning larger. Carnival is already good positioned to take advantage of this tendency: its stigmatization, sections, and market portion make it the best-positioned sail line overall ( Levin, Jones, & A ; Slade, 2011 ) . Tendencies are switching in the cruising industry towards the 45-60 twelvemonth old age group. As this age group grows in population, Carnival can take advantage of the economic systems of graduated table and offer them the best monetary values ( Marketingteacher, 2012 ) .

4.4 Technological Factors

Technological factorsA refer to mechanization, inducements, the rate of technological alteration and R & A ; D activity. These factors greatly influence other countries or facets, including the minimal efficient production degree, quality, costs, and outsourcing determinations.

Technology, and more specific Information Technology, can and must play an of import function in cruising industry reform. An interesting overview of countries where information systems can assist CI can be found in a study prepared foraˆ¦

The thought of connectivity presents

Based on a 2012 McKinsey study, ‘Minding your Digital Business ‘ , half of the executives reacting position investings in digital engineering as constructing a competitory advantage in their concern. Forming this digital border requires new thought and a new attack to entree client value and do gross and consequences addressable to the organisation.

Royal Caribbean sail lines sought that border when it was constructing the Oasis-class ships ( The digital Edge ) , On these big outsize ships Royal Caribbean wanted to do certain that every invitee could bask a individualized experience while being on a monolithic ship with 1000s of other clients. First measure was puting a clear and unambiguous result – extinguishing the demand for lines on board. A multi-disciplinary squad was put together to place the constrictions in the procedure.

When riders check in their exposures are taken and routed to a digital profile that forms the footing for digital support of their experience on board. The sail line provides a smart card for onboard activities and purchases. The smart cards, combined with their digital exposure facilitate on- and off embarkation of the ship as clients swipe their smart cards and have their digital image verified by the quartermaster.

Once on board the ship, digital engineerings give riders greater direct control of their ain experiences via smart phone apps and digital signage. Alternatively of stating invitees where they can eat, Royal Caribbean captures each of the 24 eating houses ‘ capacity information in existent clip via shape-sensing camera ‘s. This information can be found on assorted locations on the ship.

4.5 Environmental Factors

Environmental factorsA refer to all factors straight related, influenced or determined by the environing environment. This includes, but is non limited to endure, clime, geographical place, clime alteration and even insurance. Environmental factors can greatly act upon a company ‘s manner to run.

Strong dependence on events in the outside universe

The sail industry can be extremely impacted by events in the outside universe, such as 9/11, Costa Concordia clang, and the ash cloud above Iceland. These big, seeable accidents generate immense negative promotion, aching the sail industry as a whole.

Lower-profile jobs can besides hold important impacts. Two such jobs are viral eruptions and individuals lost at sea. Viral outbreaks typically necessitate the return of a ship to place port, a explosion of negative promotion in newspapers, telecasting, and industry web logs, and returning many riders. Overboard incidents ‘ have effects that are harder to foretell: the company is frequently faced with cases and negative intelligence narratives ( Levin, Jones, & A ; Slade, 2011 ) .

4.6 Legal Factors

Legal factorsA refer to all the Torahs straight connected to a concern and its country of activity, including consumer jurisprudence, antimonopoly jurisprudence, favoritism jurisprudence and wellness and safety jurisprudence.

Complex diverseness of international and federal codifications and ordinances

The sail line industry must stay with a complex diverseness of international and federal codifications and ordinances. All ships sing ports, irrespective of where they are flagged, must follow with all applicable federal ordinances. In the US for illustration, they have ‘the duty for guaranting that these ships meet all international conventions and domestic demands for safety, security and environmental protection ‘ ( USCG, 2012 ) .

The Cruise Lines International Association ( CLIA ) serves as a non-governmental advisory organisation to the International Maritime Organization ( IMO ) , an bureau of the United Nations. The IMO mandates planetary ordinances for the safety and operation of sail ships. The international Convention for the Safety of Life at Sea ( SOLAS ) includes comprehensive information on safety equipment and processs.

The International Ship and Port Facility Security Code ( ISPS ) , a wide set of security demands for ships and port installations, was added as an amendment to SOLAS after the September 11, 2001 onslaughts. Conformity with SOLAS criterions and other internationally recognized conventions is monitored by both the ship ‘s flag and port province representatives, which is the US Coast Guard in the US.

The Cruise Vessel Security and Safety Act contains some new commissariats and clarifies other bing CLIA policies, such as how the sail lines study allegations of offense to the US authorities.

In add-on to denote and unheralded safety reviews, the US Coast Guard yearly conducts a Control Verification Certificate scrutiny for every sail ship that ports in the US for conformity with both federal and international ordinances ( Cruiseindustryfacts, 2012 ) .

With merchandises as Electronic Health Records and medical charge services, the Cruise Industry has to follow with the Health Insurance Portability and Accountability Act ( HIPAA ) , the primary jurisprudence that establishes the US legal model for wellness information privateness ( US Department of Health & A ; Human Services, 1996 ) .

5. Carnival Cruise Lines SWOT Analysis

When we combine the 3 theoretical accounts as discussed in chapters 2, 3, and 4, we can deduce strengths, failings, menaces and chances ( SWOT ) for Carnival Cruise Lines. The below image indicates conceptually how we have used the 3 different theoretical accounts to finally deduce the specific SWOT analysis of Carnival Cruise Lines.

Figure Ten: Combination of 5 forces theoretical account, 7-S theoretical account and PESTEL analysis

The information of the 5forces theoretical account of Porter gives input to all 4 countries of the SWOT analysis. The information of the 7S theoretical account gives input, since it ‘s chiefly concentrating on the internal set up of the organisation, to the strengths and failings of Carnival Cruise Lines. Last, the PESTEL analysis gives input to the chances and menaces to the organisation. As already mentioned in chapter 3, gives the PESTEL analysis a more in deepness penetration what external forces can hold an influence on the sail industry as a whole and Carnival Cruise Lines in particular.

Concluding, figure Ten shows the specific strengths, failings, chances and menaces of Carnival Cruise Lines. This SWOT is the synthesis of all the information provided in chapter 2, 3 and 4.



IT is incorporated in the company consequences

Focus on nucleus procedures

Increased cyberspace capacity on the ships

Consumer outreach plan can take to economic systems of scale versus travel agents

Loyalty plans are in topographic point

Strong security administration, good models, security is embedded in all other procedures

Endowment development plans in topographic point

Family-like direction manner

Easy to make concern with ( from travel agent position )

Strong acquisition scheme

Dominant market portion

Operational excellence and experience

Comprehensive portfolio

Strong fiscal place

Promote life style of each mark group

Decentralization of concern operations

Lack of terminal to stop overview of the undertaking portfolio

No prioritization procedure in topographic point

No Entire Cost of Ownership in topographic point for IT

Weak resource direction

Complex merchandise which has an impact on online ordination and demand for good relation with travel agents

Bequest systems

No benefits tracking in topographic point

Poor safety record

Over-dependence on the US Market

No integrated CRM system



Turning Asiatic market

Benchmarking is hard within the sector

Technological developments in satellite connexion

Role of travel agents is altering

Number of on-line engagements is increasing and increasing more every twelvemonth

Still large market portion to gaining control ; merely 23 % of US population has of all time taken a sail

Pricing based on informations analysis

Profitable concern

Strongly favourable demographics

Complex diverseness of environmental, wellness and safety statute law

Multiple trade organisations are in topographic point

Changing consumer tendencies, both societal and technological

Technological development in satellite communicating

Increasing fuel monetary values

Floating hotel with independent IT

Changing consumer demands, i.e. BYOD, connectivity )

Strong dependence on events in the outside universe ( 9/11, Costa clang, ash cloud above Iceland )

Conformity to a complex diverseness of Torahs and ordinances ( planetary company )

Competing with the whole leisure industry which consequences in different challenge and higher cost for IT

Strongly competitory industry

Speed of technological alterations

Outsourcing degree 2 & A ; 3 support hard because of really specific cognition

Decreasing net income

Hugh hard currency escape

High fuel monetary values

Geopolitical instability

Tax loopholes

Global economic recession

Overblown media attending when something happens on a sail ship

Due to the detonating market in Asia, systems need to be set up in Chinese characters. This is a challenge for most systems

Figure Ten: SWOT analysis of Carnival Cruise Lines

Based on this SWOT we can reason that Carnival Cruise Lines is active in a really competitory environment. The demand for cost consciousness combined with uninterrupted invention in order to present the client experience in important. In the undermentioned chapter we will travel deeper into the strategic IT choices we think Carnival Cruise Lines should take to maintain their dominant infinite in the market, or even turn their market portion.

6. Scheme Analysis

Difficult determinations have to be made. Should CCL go on pull offing engineering platforms with a decentralized attack, in which each CLL trade name name chose its ain IT platforms and had the liberty to run them? Or should CCL take a assorted attack, in which the same criterion applications would run throughout the endeavor but would be managed independently by Headquarters in US and UK offices? Or should CCL adopt a “ one-firm ” attack and boldly shoot for a centralised execution of its most critical systems ( HCM and fiscal statements ) , with all its offices interconnected on the same “ case ” of a package platform?

6.1 Cruise Industry drivers

In order to understand how Carnival Cruise Lines can leverage their menaces and failings and turn them around into strengths and chances, we need to take a closer expression at the value concatenation of Carnival Cruise Lines. The thought of a value concatenation was foremost suggested by Michael Porter ( Porter, 1980 ) to picture how client value accumulates along a concatenation of activities that lead to an terminal merchandise or service. Porter describes two major classs of concern activities: primary activities and support activities. Primary activities are straight involved in transforming inputs into end products and in bringing and after-sales support. Support activities support primary activities and other support activities.

Despite the fact that Carnival Cruise Lines serves different markets with different client penchants, Carnival does non necessitate to change its value concatenation to delight different client sections. Each sail line trade name is able to add value by offering the same trade name experience with somewhat different monetary value points and cruise line experience offerings. The value concatenation, shown in Figure X, is focused on giving clients high quality holiday bundles, a broad assortment of holidaying options and a delicious overall sail holiday experience.

Figure Ten: Porter ‘s value concatenation for Carnival Cruise Lines

Based on our analysis and in-depth interviews with sail industry experts we found that there are 4 chief drivers that define the sail industry: velocity to market, consumer demands, client direction and cost direction. Based on Carnival Cruise Lines mission, vision, values and concern theoretical account we identified 4 strategic focal point countries from the engineering position that will direct the information direction scheme for 2007-2011 for Carnival Cruise Lines.

The way and aims with respect to the strategic focal point are defined in strategic purposes. These strategic purposes define betterments of Carnival Cruise Lines ‘ strategic and operational effectivity from a engineering point of position.

6.2 Strategic Purposes


Speed to market

For Carnival Cruise Lines it is important to present their client offerings fleetly to the market, particularly in the extremely competitory market they are in. In order to maintain their strategic dominant place in the market, they need to be able to present their offerings before the competition. This requires from IT that they can rapidly operationalize the concern demand. To enable this, the IT substructure will necessitate to back up working across functional and organisational boundaries in the most effectual manner.

Customer Relationship Management

Customer Relationship Management ( CRM ) can be seen as a procedure in which in-depth analysis of client behaviour and cognition about the client wonts, desires and demands are managed. For Carnival Cruise Lines it will be of import to increase the focal point on return clients, since at this minute most clients are first clip patrol cars. In add-on to Customer Relationship direction, a CRM system would assist to acknowledge and expect on client ‘s demands. Such a system will assist to:

Identify high-end clients

The CRM system can analyse clients spend behaviour on board and determine which clients spend the most money. Carnival Cruise Lines would so be able to put up specific actions to pull those clients

Set up trueness plans

The CRM system would be able to acknowledge return clients. With the aid of a Loyalty plan these repetition clients could be rewarded for cruising with Carnival once more ( e.g. better cabin, drinks for free, aˆ¦ ) These trueness plans would be traveling across all the sail lines

Manage ailments

For each client ailments could be gathered and analysis would be performed to place the root-cause of the issue. Solutions would be captured every bit good.

Cost direction

Carnival Cruise Lines has a strong focal point on commanding costs. Building sail ships is a really expensive venture, and needs to travel manus in manus with a proper planning. Besides the edifice of the ships, there are many other undertakings ongoing on a annual footing that should present a better client experience. As in any other organisation, there are merely limited financess and resources available to present the battalion of undertakings, hence a portfolio direction and prioritization procedure should be set in topographic point. This procedure will drive the determination devising and will maximise the value per dollar spend. It will forestall duplicate of attempt and costs.

Consumer demands

While the sail industry was for long seen as the most popular manner of travelling of the old people, this is no longer the instance today. There is an increasing sum of immature people, singles and households taking a sail. This has created a displacement in consumer demands. On the one manus, people want to hold the same connectivity with the outside universe as they have at place. Due to the usage of orbiters on the ship this creates a existent challenge for the sail industry, and Carnival in specific. Guests non merely want to hold the same connectivity, they besides want to be able to utilize their ain device to link to the web. The IT substructure will necessitate to be able to back up a higher connectivity and support a scope of devices to run into these client demands.

6.3 IT Requirements

The strategic purposes require farther inventions on information engineering. This may take to farther sweetenings to already bing solutions every bit good as the debut of new engineerings. For each of the strategic purposes we defined one or more engineering demands. An overview of these demands is given in Table X. The demands are the footing for the designation of strategic IT initiatives. In the following chapter we propose a deployment agenda for those enterprises.

Table X. Strategic Intentions and IT Requirements

Strategic purposes

Information technology Requirements





Supply ( Strategic IT purposes )

Speed to market

Deliver offerings faster to the client

Reduce clip lines of offering bringing

Minimize duplicate of attempt

Improve communicating and coaction between concern lines

A flexible, efficient and effectual IT landscape and IT processesaˆ¦

Duplication = ERP

Collaboration = ERP

Cloud… Communication = SaaS / SOA

Reorganize IT landscape and IT processes ; replacing of a hodgepodge of bequest applicationsaˆ¦

Sourcing scheme: maintain nucleus IT applications in-house

Outsource non concern critical IT ; off-the-rack applications to best-of-breed spouses

Customer Relationship Management

Supply 1 position of the client

Recognize repetition clients

Improve cognition about the client

Increase trueness plans

Analysis of client behaviour

Targeted selling actions

Cardinal client database: cognizing the possible value of the client

Understanding client experience: client satisfaction

Plan initiated: from CRM to CEM ( Customer Experience Management )

Measure client satisfaction = SERVQUAL

Initial cleansing client maestro informations and prevent come ining coarseness client informations = CRM

Customer ( profitableness ) cleavage / acknowledge reiterating clients

Cost Management

Make the right investings

Prioritization of investings

Business instance development

Understanding impact of picks

Investings made at the right topographic point at the right clip in the right sequence.

Portfolio Management

Business Case Management

Consumer Demands

Drive consumer picks

Give information to the client to drive their determination devising

Deliver same connectivity conditions as at place

Make the stay every bit comfy as possible

Bring your ain device on the boataˆ¦

Your ain device as point-off-sales

Connectivity: client wireless local area network.

Mobile Platform connectivity

7. IT Initiatives


7.1 Information Management Strategy


7.2 IT Initiatives


7.2.1 Speed to market

( beginning: HBR concern instance en Janssen 2012 )

IT supply

A period of heavy consolidation and acquisitions of sail trade names resulted in CCL as they are now. But, every acquisitioned trade name stayed a separate organisation entity within CCL called concern units. Currently CCL has 12 separate concern units in entire. Every concern unit has its ain IT section with their ain systems, applications and IT substructure. Following to this IT landscape diverseness within the concern units, CCL owns many bequest systems. Due to the fact there are n’t many participants in the sail sector, so most of the strategic of import applications are custom made.

Due to this “ separate concern unit ” attack CCL has a complex and diverseness IT landscape and makes it hard for CCL to incorporate and pass on its information, with extra disadvantage that it ‘s extremely dearly-won to run support and their IT substructure. IT inventions are hard to implement, if an advanced system is chosen to implement at CCL, in many instances it takes excessively long. The CCL IT landscape is non good prepared to follow inventions or communicate and interconnect with new systems. Their Information technology costs are presently excessively high. CCL ‘s velocity to market is an serious issue.


To run most of its back-end IT operations, every bit good as to supply basic communicating and productiveness applications CCL should choose a solid fiscal spouse which diminish long term spouse hazards ( for illustration Microsoft/ Windows waiter 2000 ) . Having a individual platform and common planetary applications, like ERP, would assist CCL cut down overall outgos and let for the flexibleness to turn through scalability.

Platform choice

As mentioned before to cut down costs the coarseness and complexness of their IT landscape must be simplified. To simplify their IT landscape foremost all applications will be classified. Their nucleus or strategic IT competences should be classified as off-the-rack or custom-made applications. Legacy systems are frequently custom-made and hence hard to replace with off-the-rack applications. For illustration CCL has offices around the universe which had adopted their ain single accounting and human resources package systems, doing it really complex to acquire an up to-date snapshot of the whole organisation ‘s position at any one clip. Implementing and planetary ERP system is the first measure to take.

CCL should take for illustration for SAP ERP application because of the package giant ‘s solid fiscal place ( which diminished long-run spouse hazard ) , its planetary presence, and the high grade of integrating it offered in its applications CCL is a public dual listed company, it required a more incorporate attack to fiscal direction, one that would run into GAAP criterions and other conformity and regulative demands. Legacy fiscal direction systems impeded the development of the strongest possible operating theoretical account.

Large companies which are able to regenerate their IT landscape will hold to do of import strategic determination. For illustration should CCL travel for “ best-in-breed ” or one platform attack. Under a best-of-breed scheme, the organisation would purchase what it believed was the best possible application in the market for a specific need-potentially stoping up with many applications, from a overplus of sellers, that did non needfully “ talk to each other. ” Large disadvantage is called the Pareto consequence created by the company ‘s demands, wherein a comparatively little figure of specialised applications demands tended to make a disproportionately big figure of complexnesss. In add-on, running multiple applications would necessitate multiple specializers, increasing the preparation costs and IT personnel count. This is precisely what we want to forestall, we want cut costs in IT staff and application costs.

The one-platform attack would hold the advantage of bring forthing of import economic systems of graduated table for the company. Biggest advantage and most of import, CCL could expeditiously run with a lower IT support caput count when covering with a individual platform, cut downing preparation costs for its IT specializers while leveraging economic systems of graduated table under the constitution of planetary support centres.

Seller statements

Applications sourced from the same seller typically “ talk ” to each oth


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